TIDMATC
RNS Number : 2310X
Atlantic Coal PLC
27 August 2015
Atlantic Coal plc / Index: AIM / Epic: ATC / Sector: Mining
Atlantic Coal plc ("Atlantic" or the "Company")
Interim results
Atlantic Coal, the AIM listed opencast anthracite coal
production and processing company with primary activities in
Pennsylvania, USA, announces its results for the six months ended
30 June 2015 together with an update on the development progress at
its Stockton anthracite mine ("Stockton"), located near Hazleton,
Pennsylvania.
Highlights
Key financial summary
6 months ended 6 months ended Change
30 June 2015 30 June 2014
--------------------- --------------- --------------- ------------
$ $
--------------------- --------------- --------------- ------------
Turnover 10,362,897 9,447,100 +9.7%
--------------------- --------------- --------------- ------------
Cost of sales 5,250,392 7,486,803 -29.9%
--------------------- --------------- --------------- ------------
Profit /(loss)
from operations 4,244,778 (162,531) +$4,407,309
--------------------- --------------- --------------- ------------
Total comprehensive
income 4,187,256 (207,010) +$4,394,266
--------------------- --------------- --------------- ------------
Total assets 48,224,019 37,180,017 +29.7%
--------------------- --------------- --------------- ------------
Cash and cash
equivalents 571,393 295,787 +93.2%
--------------------- --------------- --------------- ------------
Key production/sales summary
6 months 6 months Change
ended ended
30 June 2015 30 June
2014
------------------------- -------------- ---------- -------
Clean Coal Production
(tons) 91,877 84,567 +8.6%
------------------------- -------------- ---------- -------
Run of Mine Production
(tons) 315,049 191,007 +64.9%
------------------------- -------------- ---------- -------
Overburden Production
(BCY) 2,213,488 1,351,240 +63.8%
------------------------- -------------- ---------- -------
Total Coal Sales (tons) 105,971 75,761 +39.9%
------------------------- -------------- ---------- -------
Wash Recovery Rate (%) 53.1 42.5 +24.9%
------------------------- -------------- ---------- -------
Commenting on the results, Atlantic Coal's Managing Director
Steve Best said:
"I am pleased to report an excellent performance in H1 in what
have been challenging global market conditions. Set against this
background the Company has performed extremely well, moving into a
meaningful profit after a small loss in the comparable period last
year and the overall loss for 2014. The performance is particularly
noteworthy as the reporting period also includes Q1 when our
Stockton Mine again faced severe adverse weather and temperature
conditions and Q2 when our wash plant was not operational for 16
days for refurbishment and improvements.
"The Company's decision to modernise the mining fleet with new
haul trucks and excavators, upgrade both the capacity and
performance of the wash plant and (immediately post-period end) to
commission a new rail loading facility is now bearing fruit as we
continue to mine the near solid 30 feet thick Mammoth seam along
with the Diamond, Orchard and Primrose seams which are also
producing in line with, or ahead, of our internal expectations.
We look forward to the usual seasonal increase in anthracite
prices in the second half of 2015 and which must also be seen
against the background of anthracite prices holding up well
compared with prices for thermal bituminous coal. All of this gives
me confidence to look forward positively to the second half of the
year."
Chairman's statement
Operations review
This set of results for the six months to the 30 June 2015 with
an operational profit of $4.2 million represents a remarkable
turnaround for the Company and demonstrates the results of the
Company's decision to modernise Stockton to exploit the high
quality anthracite reserves, in particular those arising from the
30 feet thick Mammoth seam. We have not only reduced our operating
costs and increased our production capability with new haul trucks
and excavators, a refurbished and increased capacity wash plant and
the advance of our mining operations into the near solid Mammoth
seam, but we have also developed sales of Run of Mine coal to other
anthracite processors thereby increasing both sales volumes and
revenue.
Up until December of 2014 we were mining areas of Mammoth seam
with between 35% and 44% of anthracite still remaining after
historical underground mining. The advance of mining into near
solid (up to 90%) anthracite remaining, together with improved
recoveries in the Diamond, Orchard and Primrose seams has
substantially reduced our mining ratio (cubic yards of overburden
excavated per ton of anthracite produced) which is the main
determinant of mining costs. This reduces our excavating costs,
hauling costs and washing costs. This positive change in mining
conditions was a prime determinant in our decision to modernise
Stockton and this, together with lower diesel fuel prices, is also
making a major contribution to our reduced mining costs and
increased profit.
As announced on 14 August 2015, immediately post-period end we
also commissioned our new rail loading facility on the Reading,
Blue Mountain and Northern Railroad at the eastern end of our
Stockton property. This not only facilitates our access to more
distant markets in the Mid-west and West of the USA, for instance
the 2,400 miles haul to Idaho, but also makes us more competitive
in these markets as we now avoid road haulage costs to, and loading
costs at, third party operated railheads.
We have long stated that our ambition is to grow both our
reserve base of anthracite and our production capacity and have
been actively looking for further high quality and economically
viable anthracite coal properties. We believe that our successful
mining operations at Stockton give Atlantic a distinct advantage in
being able to successfully operate mines where other operators may
not have succeeded. There are clearly some good mining
opportunities in the Pennsylvania anthracite fields but these do
require careful due diligence of not only the anthracite reserves
but also the funding arrangements to acquire and operate these
mines. I continue to support our CEO, Steve Best, together with our
entire technical team in not only finding the right properties for
Atlantic to acquire, but also to make sure the Company secures a
cost effective financing package so we can execute on this strategy
once we have located a suitable target.
We are delighted that Atlantic has been able to manage our
Stockton operations in such an effective manner against a
challenging trading environment. Shareholders should remain
confident that the Company is well positioned to benefit from both
the seasonal H2 positive upturn in demand and pricing for its
anthracite and also the medium to longer term prospects for our
high quality specialist product.
Outlook
While we are experiencing some challenging market conditions
with world commodity prices for minerals being adversely impacted,
anthracite prices have held up relatively well compared with, for
example the bituminous thermal coal market. This is a reflection of
the range of high quality niche markets in which we operate with
anthracite having a wide range of specialist uses which continue to
diversify away from its historic use as a high quality clean
burning fuel to its main attraction as a source of high quality
carbon.
Our production and sales volumes are good and we are also
benefiting from new ROM sales which have already exceeded 50,000
tons this year.
As we proceed through second half of 2015, while we still
anticipate challenging market conditions, we have substantially
reduced our cost base and with the support of our operational team,
we believe that the Company is well positioned to exploit exciting
and expanding new customer channels.
Finally, I would like to take this opportunity to thank our
team, shareholders and associates for their support over recent
months. We look forward to providing further updates at the
appropriate time.
Adam Wilson
Chairman
For further information on the Company, visit
www.atlanticcoal.com or contact:
Steve Best Atlantic Coal plc Tel: 0191 386
6392
Nick Naylor Allenby Capital Tel: 020 3328
Limited 5656
Alex Price Allenby Capital Tel: 020 3328
Limited 5656
Condensed Consolidated Income Note 6 months 6 months
Statement to to
30 June 30 June
2015 2014
Unaudited Unaudited
$ $
Turnover 10,362,897 9,447,100
Cost of sales (5,250,392) (7,486,803)
Gross profit 5,112,505 1,960,297
Administration expenses (3,193,312) (1,627,793)
Exceptional expenses - (59,604)
Other income 1,943,853 151,134
Other gains/(losses) - net 381,732 (586,565)
Profit/(Loss) from operations 4 4,244,778 (162,531)
(MORE TO FOLLOW) Dow Jones Newswires
August 27, 2015 02:04 ET (06:04 GMT)
Finance costs (509,939) (109,390)
Profit/(Loss) from ordinary
activities before tax 3,734,839 (271,921)
Income tax expense - -
_________ _________
Retained Profit/(Loss) for
the period attributable to
shareholders 3,734,839 (271,921)
Profit/(Loss) per share - 6 0.080 cents (0.01)
basic cents
All activities are classified as continuing.
Condensed Consolidated Statement 6 months 6 months
of Comprehensive Income to to
30 June 30 June
2015 2014
Unaudited Unaudited
$ $
Profit/(Loss) for the period 3,734,839 (271,921)
Other comprehensive income:
Items that may be reclassified
subsequently to profit or loss
Exchange differences on translating ____ 452,417 ____ 64,911
foreign operations
Total comprehensive income for
the period attributable to equity
holders of the Company 4,187,256 (207,010)
Condensed Consolidated Balance 30 June 31 December
Sheet 2015 2014
Unaudited audited
Note $ $
ASSETS
Non-current assets
Property, plant & equipment 10 28,778,218 16,744,999
Land, coal rights and restoration 7 11,482,032 11,796,159
Other assets 206,339 199,644
40,466,589 28,740,802
Current assets
Inventories 5,176,753 1,614,485
Trade and other receivables 1,951,238 2,679,438
Other assets 58,046 58,046
Cash and cash equivalents 571,393 725,517
7,757,430 5,077,486
Total assets 48,224,019 33,818,288
EQUITY & LIABILITIES
Equity
Share capital 8 5,510,300 5,510,300
Share premium 8 40,359,710 40,359,710
Merger reserve 13,898,706 13,898,706
Reverse acquisition reserve (12,999,288) (12,999,288)
Other reserves 44,117 101,077
Translation reserve (3,401,173) (3,853,590)
Retained losses (31,597,641) (35,389,440)
11,814,731 7,627,475
Non-current liabilities
Borrowings 9 19,529,574 10,211,809
Accrued restoration costs 4,075,909 3,916,696
23,605,483 14,128,505
Current liabilities
Trade and other payables 8,298,955 8,070,911
Borrowings 9 4,454,430 3,833,297
Accrued restoration costs 50,420 158,100
12,803,805 12,062,308
Total equity and liabilities 48,224,019 33,818,288
Condensed Consolidated Statement of
Changes in Equity
Attributable to the owners of the parent
--------------------------------------------------------------------------------------------------------
Share Share Merger Other Reverse Translation Retained Total
capital Premium reserve reserves acquisition reserve losses equity
reserve
$ $ $ $ $ $ $ $
--------------- ---------- ----------- ----------- --------- ------------- ------------ ------------- -----------
As at 1
January
2015 5,510,300 40,359,710 13,898,706 101,077 (12,999,288) (3,853,590) (35,389,440) 7,627,475
Loss for
the period - - - - - - 3,734,839 3,734,839
Other
comprehensive
income
Exchange
differences
on
translating
foreign
operations - - - - - 452,417 - 452,417
--------------- ---------- ----------- ----------- --------- ------------- ------------ ------------- -----------
Total
comprehensive
income - - - - - 452,417 3,734,839 4,187,256
--------------- ---------- ----------- ----------- --------- ------------- ------------ ------------- -----------
Expiration
of options - - - (56,960) - - 56,960 -
--------------- ---------- ----------- ----------- --------- ------------- ------------ ------------- -----------
Total
transactions
with owners - - - (56,960) - - 56,960 -
--------------- ---------- ----------- ----------- --------- ------------- ------------ ------------- -----------
As at 30
June 2015 5,510,300 40,359,710 13,898,706 44,117 (12,999,288) (3,401,173) (31,597,641) 11,814,731
--------------- ---------- ----------- ----------- --------- ------------- ------------ ------------- -----------
Attributable to the owners of the parent
--------------------------------------------------------------------------------------------------------
Share Share Merger Other Reverse Translation Retained Total
capital Premium reserve reserves acquisition reserve losses equity
reserve
$ $ $ $ $ $ $ $
--------------- ---------- ----------- ----------- --------- ------------- ------------ ------------- -----------
As at 1
January
2014 5,510,300 40,359,710 13,898,706 94,666 (12,999,288) (2,364,293) (31,857,428) 12,642,373
Profit &
Loss for
the period - - - - - - (271,921) (271,921)
Other
comprehensive
income
Exchange
differences
on
translating
foreign
operations - - - - - 64,911 - 64,911
--------------- ---------- ----------- ----------- --------- ------------- ------------ ------------- -----------
Total
comprehensive
income - - - - - 64,911 (271,921) (207,010)
--------------- ---------- ----------- ----------- --------- ------------- ------------ ------------- -----------
Total
transactions
with owners - - - - - - - -
--------------- ---------- ----------- ----------- --------- ------------- ------------ ------------- -----------
As at 30
June 2014 5,510,300 40,359,710 13,898,706 94,666 (12,999,288) (2,299,382) (32,129,349) 12,435,363
--------------- ---------- ----------- ----------- --------- ------------- ------------ ------------- -----------
Condensed Consolidated Cash 6 months 6 months
Flow Statement to to
30 June 30 June
15 14
Unaudited Unaudited
$ $
Cash flows from operating activities
Profit/(loss) before taxation 3,734,839 (271,921)
Adjustments for:
Finance costs 509,939 109,390
Depreciation 1,777,358 1,071,133
Mine depletion and mineral
depreciation 314,127 299,241
Accretion, accrued restoration
costs 153,333 183,344
Reclamation costs incurred (101,800) (16,900)
Profit on disposal of property,
plant & equipment (1,943,853) (151,134)
Foreign exchange loss 493,450 38,783
Loss on derivative financial
instruments - 171,132
Changes in working capital:
Decrease/(increase) in trade
and other receivables 945,873 (600,939)
Increase in inventories (3,562,268) (177,310)
Increase in trade and other
payables 364,237 214,568
Net cash generated from operating
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August 27, 2015 02:04 ET (06:04 GMT)
activities 2,685,235 869,387
Cash flows from investing activities
Purchase of property, plant
and equipment (50,582) (269,103)
Proceeds from sale of property,
plant and equipment - 151,134
(Increase)/decrease in deposits
& escrow (6,695) (11,847)
Proceeds received from derivative
financial instruments - 217,086
Net cash generated from/(used
in) investing activities (57,277) 87,270
Cash flows from financing activities
Repayments of borrowings (698,463) (433,891)
Interest paid (509,939) (109,390)
Finance lease payments (1,565,235) (999,673)
Net cash used in financing
activities (2,773,637) (1,542,954)
Net (decrease) in cash and
cash equivalents (145,679) (586,297)
Effect of foreign exchange
rate changes (8,445) 5,081
Cash and cash equivalents at
the beginning of the period 725,517 877,003
Cash and cash equivalents at
the end of the period 571,393 295,787
Significant non-cash transactions
During the period ended 30 June 2015, the Group purchased
various items of plant and equipment with an aggregate value of
$14,810,074 (30 June 2014: $9,878,956) through finance leases.
Notes to the unaudited interim results
1. General information
The principal activity of Atlantic Coal plc ('the Company') and
its subsidiary (together 'the Group') is the development and
operation of the Stockton Colliery which comprises the Stockton
Mine and an anthracite washing plant in Pennsylvania. There is no
significant seasonality or cyclicality of the Group's operations
between interim periods.
The Company's shares are listed on the AIM Market of the London
Stock Exchange (AIM). The Company is incorporated and domiciled in
the United Kingdom. The address of its registered office is 200
Strand, London WC2R 1DJ.
2. Basis of preparation
The condensed consolidated interim financial statements have
been prepared in accordance with the requirements of the AIM Rules
for Companies. As permitted, the Company has chosen not to adopt
IAS 34 "Interim Financial Statements" in preparing this interim
financial information. The condensed interim financial statements
should be read in conjunction with the annual financial statements
for the year ended 31 December 2014, which have been prepared in
accordance with International Financial Reporting Standards (IFRS)
as adopted by the European Union.
The interim financial information set out above does not
constitute statutory accounts within the meaning of the Companies
Act 2006. It has been prepared on a going concern basis in
accordance with the recognition and measurement criteria of
International Financial Reporting Standards (IFRS) as adopted by
the European Union. Statutory financial statements for the year
ended 31 December 2014 were approved by the Board of Directors on 5
June 2015 and delivered to the Registrar of Companies. The report
of the auditors on those financial statements was unqualified.
The 2015 interim financial report of the Company has not been
audited but has been reviewed by the Company's auditor, PKF
Littlejohn LLP, whose independent review report is included in this
Interim Report.
Going concern
The Directors, having made appropriate enquiries, consider that
adequate resources exist for the Group to continue in operational
existence for the foreseeable future and that, therefore, it is
appropriate to adopt the going concern basis in preparing the
condensed interim financial statements for the period ended 30 June
2015.
Risks and uncertainties
The Board continuously assesses and monitors the key risks of
the business. The key risks that could affect the Group's medium
term performance and the factors that mitigate those risks have not
substantially changed from those set out in the Group's 2014 Annual
Report and Financial Statements, a copy of which is available on
the Group's website: www.atlanticcoal.com. The key financial risks
are liquidity risk, foreign exchange risk, credit risk, price risk
and interest rate risk.
Critical accounting estimates
The preparation of condensed interim financial statements
requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the end of the reporting
period. Significant items subject to such estimates are set out in
note 2 of the Group's 2014 Annual Report and Financial Statements.
The nature and amounts of such estimates have not changed
significantly during the interim period.
Accounting policies
The same accounting policies, presentation and methods of
computation have been followed in these condensed interim financial
statements as were applied in the preparation of the Group's
financial statements for the year ended 31 December 2014.
Changes in accounting policy and disclosures
New and amended standards adopted by the Group:
There are no IFRSs or IFRIC interpretations that are effective
for the first time for the financial year commencing 1 January 2015
that would be expected to have a material impact on the Group.
4. Profit for the period
Profit for the period includes the following items which are
unusual because of their nature, size or incidence:
6 months 6 months
to to
30 June 30 June
15 14
Unaudited Unaudited
$ $
Foreign exchange gains/(losses) 381,732 (402,417)
Depreciation 1,772,986 1,037,931
5. Dividends
No dividend is proposed for the period.
6. Profit per share
The calculation of profit per share of 0.08 cents (30 June 2014:
profit per share of 0.01 cents) is based on a retained profit of
$3,734,839 for the period ended 30 June 2015 (30 June 2014:
retained loss of $271,921) and the weighted average number of
shares in issue in the period ended 30 June 2015 of 4,662,538,502
(30 June 2014: 4,662,538,502). The diluted earnings per share was
0.038 cents based on a retained profit of $3,734,839.
Details of share options that could potentially dilute earnings
per share in future periods are disclosed in note 8 to these
condensed interim financial statements.
7. Land, Coal Rights and Restoration Costs
Land,
Railway surface Exploration
Stockton relocation and mineral licence
mine costs costs costs costs Total
$ $ $ $ $
Cost
As at 1 January 2014 6,309,145 3,198,727 3,550,000 6,000,000 19,057,872
Decrease in retirement
obligation estimate (640,246) - - - (640,246)
---------------------------- ------------ ------------ ------------- ------------ -------------
As at 31 December
2014 5,668,899 3,198,727 3,550,000 6,000,000 18,417,626
---------------------------- ------------ ------------ ------------- ------------ -------------
As at 30 June 2015 5,668,899 3,198,727 3,550,000 6,000,000 18,417,626
---------------------------- ------------ ------------ ------------- ------------ -------------
Mine depletion and mineral
depreciation
As at 1 January 2014 3,794,843 524,805 1,932,911 - 6,252,559
Charge for the year 117,718 167,961 83,229 - 368,908
As at 31 December
2014 3,912,561 692,766 2,016,140 - 6,621,467
---------------------------- ------------ ------------ ------------- ------------ -------------
Charge for the period 89,463 155,107 69,557 - 314,127
As at 30 June 2015 4,002,024 847,873 2,085,697 - 6,935,594
---------------------------- ------------ ------------ ------------- ------------ -------------
Net book value
As at 1 January 2014 2,514,302 2,673,922 1,617,089 6,000,000 12,805,313
---------------------------- ------------ ------------ ------------- ------------ -------------
As at 31 December
2014 1,756,338 2,505,961 1,533,860 6,000,000 11,796,159
---------------------------- ------------ ------------ ------------- ------------ -------------
As at 30 June 2015 1,666,875 2,350,854 1,464,303 6,000,000 11,482,032
---------------------------- ------------ ------------ ------------- ------------ -------------
The retirement and depreciation provision for the Stockton mine
property is calculated using current cost estimates provided by an
independent third party consultant. The current cost estimates are
applied to the required reclamation activities up to the date of
closure of the mine.
8. Share capital
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